Under pressure from Wall Street lobbyists, federal regulators have agreed to soften a rule intended to rein in the banking industry’s domination of a risky market.

The changes to the rule, which will be announced on Thursday, could effectively empower a few big banks to continue controlling the derivatives market, a main culprit in the financial crisis.

The $700 trillion market for derivatives — contracts that derive their value from an underlying asset like a bond or an interest rate — allow companies to either speculate in the markets or protect against risk.

It is a lucrative business that, until now, has operated in the shadows of Wall Street rather than in the light of public exchanges. Just five banks (JPMorgan Chase, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs) hold more than 90 percent of all derivatives contracts.

The SEC has been trying fruitlessly to set up an open exchange for derivatives since 2005. I will bet a quarter that there won't be an open exchange until ... ever.

The only thing that will save the U.S. banking system from another crash would be the reinstatement of Glass-Steagal. Then, when the derivatives market crashes again, the only really useful part of the financial system -- old-fashioned banking services -- will survive while the taxpayers will watch the gamblers bite the dust instead of bailing them out again.